Prices continue to firm in the overnight session with wheat gaining on corn, and meal on soyoil, for a change. Weekly export sales were not much to get excited about, though wheat sales were the more impressive item. New sales for corn remain about 3 times ahead of last year’s pace, while eyes are on China to see if they purchase US beans. Bean export sales plus shipments year-to-date is 2.275 bln bu, exceeding the USDA projected number at 2.270 bln bu. June crush was negative for beans, but funds did not pay much attention instead turning to drier forecasts and purchasing a few beans on positive chart technical price action.

STORIES
The drought ravaged Safrinha corn crop in Brazil has sparked a large number of companies to exit their contracts on washout clauses, creating what some are calling the potentially biggest wave of export cancellations for the world’s number 2 supplier in 5 yrs.

WEATHER – Weather this week features plenty of rainfall in the heart of the Midwest, and in certain areas of Iowa, Neb., etc. Over the last 24 hrs. rain fell over Kansas, MO., Neb., Wisconsin, Minn., northern Illinois, and northern Michigan. The focus of the trade, however, is now on next week, which looks to be warmer and drier heading into the end of July. Drier weather will be welcome in areas of the eastern cornbelt where ponding and flooding has taken place. While areas such as Iowa and South Dakota saw some relief rains, more will be needed in the weeks coming.

Back Sea conditions are also turning drier for wheat in Ukraine and Russia. Wheat, which has already been given a bullish kick-start to the upside via the July WASDE, may see support from ongoing dryness in this area should it continue.

ANNOUNCEMENTS
China’s Sinograin sold more than 12,000 tonnes of imported GMO corn at an auction Friday, which was 7% of the total offer.

French soft wheat conditions declined in the week to July 12 while farmers made little progress harvesting due to unusually wet weather.

Argentine wheat is mostly good to excellent, with more than 96% of the crop for 21/22 planted, the exchange rate said on Thursday.

Ukraine’s grain harvest is 8.6% complete, at 5.5 mln mt. Favorable weather could help harvest the 76 mln tonnes of grain this year.

Calls are as follows:
beans: 13-16 higher
meal: 3.80-4.20 higher
soyoil: 30-40 higher
corn: 3 1/2-4 1/2 higher
wheat: 13-15 higher

What to look for today? Prices closed on a solid note close to the highs which likely promotes follow-through buying at the open.

Outside markets feature higher stocks, up 60 pts, with the crude oil market trading around $71.13/barrel, and the US dollar firmer to 92.70.

Tech talk: November bean trend is clearly higher now as prices trade into minor resistance drawn from the multiple highs of $14.28 which comes down and crosses at $13.98. Trade over $13.98 finds little back resistance to stop gains over $14.00 to $14.15. The gap that was filled at $13.82 1/2 often becomes support when prices settle or congest around it, and that holds true today. Trading range moves up to $13.15-$14.15, and it won’t take much to get to the top of the chart. The December meal chart shows its range from multiple lows of $355.00 to the spike high of $380.00. For the day, prices appear ready to work into a wedge formation, but the next direction from $370.00 appears to be higher. December soyoil prints a new high for the move up at 6506c, but pullbacks here continue to hold, and each pullback could now lead to a targeted high trade of 66c to 67c. December soyoil held on the break to 63c to test 65c, and now 64c is a low. Would continue to price aggressively on pullbacks. December corn continues to move into its wide gap which was from $5.52 to $5.73 1/2. While it is a slow process, would look now for pullbacks to continue to see support, and this market has now defined $5.50 as a low from which a further rally can build. Look to see a pullback towards $5.55 to hold as this market attempts gap-fill. In the lead to the upside today is December wheat, which took a day to digest the bullish USDA numbers but never looked back once prices moved over the 100 day moving average of 6.69. The market is now moving towards key resistance from $6.98-$7.02, where multiple highs serve as resistance. Look to go there, but given this is a Friday and the markets are on a good rally we could see profit-taking as well. In the big picture, the range for Dec. wheat has moved up considerably, and the low end is now $6.50.

SEPTEMBER CORN: The market continues to recover from the sell-off low of $5.20 3/4, with a bounce towards the open gap which is from $5.88 to $5.70. The market began to partial gap-fill by trade to $5.72, but the upside seems stalled a bit and prices have to get over $5.75 to show some promise to fill the gap all the way. Corn shows why it is not the stronger market by the lack of gap-fill. However, the promise is that we can get there. Stronger support on a break if more selling occurs would now move up to the 100 day moving average at $5.50 which is also trendline support. If the market were truly going to “bull up”, then it needs to test $5.50 but remain above that level given the recent support that has surfaced. The trading range for now appears to be from $5.50 to $5.85 provided the market can move beyond $5.70.

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